After a career that included working with companies of all sizes from start-ups to industry icons, I have learned that there are four vital documents that every business needs.
The problem is that far too many do not have them. The bigger issue is that not having them invariably leads to failure.
One: A Mission Statement
It only takes a few sentences to establish for yourself, your employees and your clients your raison d’etre. I have witnessed business owners struggle for day and weeks trying to define their mission. That worries me. If you can’t state your mission, what are you doing in business? No mission = no purpose. No written Mission Statement = no vision. “Where there is no vision, the people perish.”
Two: A Policy Manual
A Policy Manual states the principles upon which your business operates. You might say that it is a compilation of the ethical and moral things you will or will not do to accomplish your mission.
A Policy Manual may deal with a wide range of matters from integrity to sustainability. For instance, you may say, “We will respect every individual and we will value their ideas.”
Simply put, a Policy Manual is the system of beliefs upon which you will run your business.
Three: A Current Business Plan
Your Mission Statement and Policy Manual should rarely, if ever, change. Your Business Plan must. I am writing this during the weekend of the 2015 NCAA basketball Sweet Sixteen. Each team has a clear mission and policies according to which they live and play. But they have a different plan for every game.
A company Business Plan defines where you plan to go and how you plan to get there, within the context of your Mission Statement and Policy Manual. As the game changes, so must your plan.
A Business Plan should include an analysis of all the factors that affect the business. It should include clearly-defined, achievable objectives, be reviewed at least annually, and revised as necessary based on the review.
Four: A Procedure Manual
No business can operate successfully for very long using a “fly-by-the-seat-of-your-pants” approach. Every process needs to be controlled. That control is your defined procedures. It is critical that every employee knows and understands your procedures. The best companies audit their procedures from time-to-time to ensure that employees are complying with them. A Procedure Manual is an absolute must for ensuring consistency, accuracy and quality.
A Procedure Manual on its own will have no meaning to employees unless they know and ascribe to your Mission Statement, your Policy Manual, and your Business Plan. Most problems occur at the lower levels of the company when the people do not understand the big picture.
I said earlier that “not having them invariably leads to failure.” I did not say that having them will ensure your success, but having them will go a long way to helping your business succeed. Many small business owners feel no need to create and follow these documents, because it seems like a waste of time. Let’s put it this way, many people who have no teeth once thought it was a waste of time to brush them. I think you get the point.